10. Comments on Proposed Decision

The proposed decision of the ALJ in this matter was mailed to the parties in accordance with Section 311 of the Public Utilities Code and comments were allowed under Rule 14.3 of the Commission's Rules of Practice and Procedure. Comments were filed on July 2, 2012, and reply comments were filed on July 9, 2012 by Cal-Am, MCWRA, MCWD and DRA.

In their comments, Cal-Am, Monterey County Water Resources Agency and MCWD have requested various clarifications of the following language that appears in the proposed decision at 2 and 24 (Ordering Paragraph 2):

...the Division of Water and Audits should continue processing all currently unprocessed Advice Letters dealing with rate base offsets for Cal-Am only facilities discussed in D.10-12-016. Cal-Am should not claim any costs incurred after January 17, 2012, the date Cal-Am announced its withdrawal from the Regional Desalination Project.

The purpose of that language is to protect Cal-Am ratepayers against additional expenditures on the Regional Desalination Project that was approved in
D.10-12-016. Given that Cal-Am is proposing a new and different project that is the subject of their application A.12-04-019, it is not reasonable to expect Cal-Am ratepayers to pay for additional expenses related to a project that is no longer being pursued.

The Commission understands that there are costs that have been incurred in A.04-09-019 related to the Regional Desalination Project that may be recoverable in rates. We will examine the recoverability of such costs in other, more appropriate proceedings, and parties will have an opportunity to make their arguments that certain costs are or are not recoverable in rates.

The language at issue was not intended to prevent Cal-Am from incurring reasonable costs related to its current application A.12-04-019, nor does it limit any more general authorization Cal-Am received prior to the selection of the Regional Desalination Project.

Cal-Am's request that the cut-off date for incurring costs be changed from January 17, 2012 to January 18, 2012 is denied as the former date is when Cal-Am said in its application A.12-04-019, at 5, and elsewhere that it had publicly announced its withdrawal of support for the Regional Desalination Project.

MCWD's request that additional recitals of fact be added under Findings of Fact is rejected because they are either not necessary or bear upon the dispute between Cal-Am, Monterey County Water Resources Agency and MCWD over costs.